Understanding “At-Will” Employment

Every state in America, except Montana and the territory of Puerto Rico,has a default rule known as “at-will” employment. Which allows employees or the employer to terminate employment at any time for any reason that does not violate the law or certain public policies.

What is “at-will” employment?

At-will employment means that either the employer or the employee can decide at any time to terminate employment. It is only limited by employment contracts, collective bargaining agreements, oral agreements or statutory prohibitions. If there aren’t any of these exceptions in place an employer is allowed to terminate an employee even if the reason is unfair, violates the company policy, or contrary to the public interest.

What States Have “at-will” Employment?

Across America “At-Will” employment is the normal default rule for employment relationships between employees and employers. The only exceptions are Montana and Puerto Rico, otherwise all states and the District of Columbia. If you don’t live in Montana or Puerto Rico, then your state has “at-will” employment as its basic rule.

Are There Exceptions To “at-will” Employment?

There are common law exceptions, to at-will employment that courts have adopted to protect employees: 1) Courts have found contracts created by things like: a) Employee handbooks that create for cause termination; b) Oral representations that employees can only be disciplined for cause; or c) Offer letters that indicate additional rights for employees. 2) Some states have statutory or common law rules call “good faith and fair dealing” meaning that every employment arrangement requires the parties to act in good faith and fair dealing, however not all states apply this legal principle; 3) Finding exceptions to the at-will default rule on grounds of public policy where an employer attempts to coerce an employee into not acting for their employment interests or the interests of the public. An employer cannot terminate an employee if the act discourages or is intended to suppress an important public interest that the public needs to maintain for example: a) Employee files a workers compensation claim or encourages other to; b) Employee reports health and safety violations to protect themselves, other employees or the public; c) Employee refuses to break the law for the employer; d) Employee refuses to punish people who refuse to break the law; e) Employee insists on being paid wages they are owed; or f) Employee seeks to consult with an attorney. Not all of these exceptions exist in every state you should consult a local employment attorney to discover which exceptions may apply in your state.